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EXHIBIT 10.10
REF. #113089
COLLATERAL PRODUCT LICENSE
THIS AGREEMENT is made effective October 30, l996, between XXXXXX BREWING
COMPANY, a Wisconsin corporation with offices at 0000 Xxxx Xxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxxxx, 00000 ("Xxxxxx"), and XXXXXXXXXXX XXXXX & COMPANY, a New
Jersey corporation with offices at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxx, XX
00000 ("Licensee").
WITNESSETH
WHEREAS, Xxxxxx has the exclusive right to license for commercial purposes
the Licensed Trademarks depicted on Schedule A hereto (the "Licensed
Trademarks:);
AND WHEREAS, the parties desire that Licensee be granted the right to use
the Licensed Trademarks in the Territory in connection with those products
identified on Schedule B hereto (the "Licensed Products");
NOW THEREFORE, in consideration of the premises and mutual covenants
herein, the parties agree as follows:
1. During the Agreement term, Xxxxxx hereby grants to Licensee the
non-exclusive right (only for retail sales within the Territory market and only
with respect to products having all the characteristics of the Licensed
Products identified on Schedule B), to use the Licensed Trademarks in
connection with the manufacture and marketing of the Licensed Products. No
activity outside of the Territory is authorized hereunder except that Licensee
may produce the Licensed Products outside the U.S. (or have others do so for
it) but only if no sales (except to Licensee) take place outside the Territory
as a result of this activity. "Retail sales" means sales of Licensed Product
directly to the ultimate consumer; provided that such sales are through the
distribution channels set forth in Paragraph 6 herein. Xxxxxx retains the
right to use the Licensed Trademarks as it sees fit outside the Territory, to
use the Licensed Trademarks on other products besides Licensed Products
anywhere, and to use the Licensed Trademarks on the Licensed Products for
activity in the Territory other than for the retail sales market. No License
is granted hereunder for the manufacture, sale or distribution of Licensed
Products as premiums, in combination sales, as giveaways, or to be disposed of
under similar methods of merchandising. "Premium" means any article used for
the purpose of increasing the sale of any other product or any service,
including but not limited to incentives for sales
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forces, and trade and consumer incentives for fundraising. "Territory" shall
be limited to the United States, its territories and possessions, and United
States Military PX's.
2. The use of Licensed Trademarks shall only be in accordance with
quality and other standards specified and approved by Xxxxxx. To this end:
(a) Licensee shall submit four (4) preproduction samples of all
Licensed Products and related containers, packaging and advertising, and all
usage of Licensed Trademarks, for written approval by Xxxxxx (or Xxxxxx'x
designee, Xxxxxxxx Projects, Inc.) before the first use or distribution thereof
(of each format). Such submission shall be approved or disapproved within
fifteen (15) business days of receipt by Xxxxxx (or Xxxxxx'x designee, Xxxxxxxx
Projects, Inc.). Licensee will not depart from the quality and design of
approved formats and samples without Xxxxxx'x prior written permission. Upon
distribution of the Licensed Products, Licensee shall also furnish Xxxxxx'x
designee, Xxxxxxxx Projects, Inc. with six (6) samples of each type of Licensed
Product and ten (10) samples of all collateral materials (i.e., hangtags,
packaging, advertising).
(b) The manufacture of Licensed Products may not be sublicensed.
(c) Xxxxxx or its designated representatives shall have the right to
inspect all manufacturing facilities for Licensed Products at any time, during
reasonable business hours.
(d) All Licensed Products and all usage of Licensed Trademarks will
comply with all applicable alcoholic beverage advertising restrictions and
safety standards, and all other applicable laws and regulations, and will be
accompanied by such notices and markings as Xxxxxx shall specify (e.g.
"Manufactured Under License," "TM," etc.).
(e) Licensee's advertising and promotional material relating to
Licensed Products will be truthful and in good taste, and will not be such as
would be likely to damage or diminish the reputation of Xxxxxx, its
identifications, or its products.
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3. In consideration of the rights granted hereunder, Licensee agrees to
pay Xxxxxx'x designee, Xxxxxxxx Projects, Inc.:
(a) a non-refundable advance against royalties of Ten Thousand Dollars
$10,000.00, made payable to Xxxxxx'x designee, Xxxxxxxx Projects, Inc. This
Paragraph 3(a) advance will not be refunded even if not earned by actual
royalties prior to termination; and
(b) a royalty of ten percent (10%) of "Xxxxxxxx" for all sales or
other commercialization of Licensed Products.
(c) Licensee agrees to pay Xxxxxx'x designee, Xxxxxxxx Projects, Inc.,
the minimum guaranteed royalty payments set forth on Schedule C according to
the payment schedule set forth therein regardless of whether actual royalties
reach that amount. Minimum guaranteed royalty payments shall be applied only
against the period they relate to and excess royalties in any period may not be
credited against periods having deficiencies. Upon termination of the
Agreement under Paragraph 8 herein, all minimum guaranteed royalty payments
shall be immediately due and owing to the extent not paid. All royalty
payments shall be sent to, and payable to, Xxxxxx'x designee, Xxxxxxxx
Projects, Inc.
(d) Payment shall be made on a calendar quarter basis, with payment
for each quarter to be made by the fifteenth day of the month following the end
of the calendar quarter.
(e) "Xxxxxxxx" means the total of the gross prices charged to
customers for all sales or other commercialization of Licensed Products after
deducting any credits for returns actually made or allowed. In computing
Xxxxxxxx no costs incurred in manufacturing, selling, advertising or
distributing the Licensed Products covered by this Agreement or any indirect
expenses shall be deducted, nor shall any deduction be made for uncollectible
accounts, cash discounts or similar allowances. Sales (or commercialization)
shall be deemed to have been made on the day of shipment or the date of
invoice, whichever is first, regardless of when or whether payment is received
by Licensee. Royalties relating to Licensed Products that are returned may be
offset against previous credits for the returned item, but only where the
return can be documented (no return reserve or estimates), and only when the
return occurs within three months of the shipment.
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(f) Payment for each calendar quarter shall be accompanied by a
detailed statement showing, by product and customer, the charges, returns,
sales and other commercialization of Licensed Products during such quarter.
Such statement and payment shall be sent to, and payable to, Xxxxxx'x
designee, Xxxxxxxx Projects, Inc.
(g) To the extent there are any below cost sales, or transfers to
related or affiliated entities, these shall be reported and shall be treated
as the greater of sales made at Licensee's then current prices for arm's length
transactions or actual charges.
4. Licensee will obtain no ownership rights in the Licensed Trademarks by
virtue of any of its activities hereunder, and all uses of the same shall inure
only to Xxxxxx'x benefit. Licensee shall have no right to take or require any
action with regard to obtaining, maintaining, or enforcing registrations or
rights in the Licensed Trademarks, but will report promptly to Xxxxxx any
suspected infringements of the Licensed Trademarks.
5. Licensee agrees to keep at a single U.S. Location accurate books of
account and records covering all transactions relating to the subject matter
herein. Xxxxxx and its duly authorized representative shall have the right at
all reasonable hours of the day to examine such books of account and records in
Licensee's possession or under its control with respect to the subject matter
and terms of this Agreement, and shall have free and full access thereto for
such purposes and for the purpose of making extracts therefrom. All such books
of account and records shall be kept available for at least two years after the
termination of this Agreement. Licensee further agrees that it will designate
a record identification symbol or number which will be used exclusively in
connection with all documents relating to the Licensed Products (and with no
other articles which Licensee may manufacture, sell or distribute). In the
event that Xxxxxx'x duly authorized representatives shall discover that
Licensee has underpaid Xxxxxx by more than 3% in any such examination, Licensee
shall reimburse Xxxxxx for its costs of such examination plus the deficiency.
Moreover, in the event Licensee has underpaid Xxxxxx by ten percent (10%) or
more, Xxxxxx shall have the right to terminate the agreement in addition to
receiving such sums.
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6. Licensee agrees to use its best efforts during the Agreement term to
sell, distribute and supply the Licensed Products throughout the U.S. on or
before December 01, 1996. Licensee's right are hereby limited to the following
distribution channels only: Mass Mkt. Discount Chains and Department Store
Chains.
7. Xxxxxx does not warrant or guarantee any Licensed Products, and
Licensee will not expressly or impliedly indicate otherwise. Licensee shall be
solely responsible for all claims resulting from its failure to comply with any
provision hereof or otherwise resulting from its activities hereunder, and
shall indemnify and defend Xxxxxx (and Xxxxxxxx Projects, Inc.) with respect to
any claims, damages, attorney fees and other loses and expenses incurred by
either (or their agents or employees) as a result of such claims or
activities. In addition, Licensee shall, throughout the useful life of all
Licensed Products it sells (and throughout this Agreement), obtain and maintain
product liability insurance having combined single limits in the amount of not
less than One Million Dollars ($1,000,000), by a policy naming Xxxxxx and
Xxxxxxxx Projects, Inc. as co-insureds and providing that the same may not be
canceled without at least thirty days prior notice to Xxxxxx and Xxxxxxxx
Projects, Inc. Copies of certificates evidencing such insurance must be
provided by Licensee to Xxxxxx (attention Corporate Banking And Insurance) and
Xxxxxxxx Projects, Inc. prior to Licensee's exercise of its rights hereunder.
8. This Agreement shall be effective as of the date first written above,
and unless otherwise terminated earlier as provided below it shall run for a
term of two (2) years and three (3) months (October 01, 1996 - December 31,
1998). This Agreement shall terminate automatically if Licensee is or becomes
bankrupt or insolvent or makes any arrangement for the benefit of creditors.
Also, if Licensee is in default hereunder, and if such default is not
completely cured within thirty days of written notice thereof by Xxxxxx, Xxxxxx
may terminate this Agreement by written notice. Failure to give notice of or
terminate for any default shall not operate as a waiver with respect to
continued or subsequent defaults.
9. After termination of this Agreement, Licensee shall have no further
right to manufacture, advertise, distribute, sell, or otherwise deal in (or
use) any Licensed Trademarks
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(or any confusingly similar marks), except as hereinafter provided. Upon a
termination:
(a) Licensee shall prepare a detailed inventory list of Licensed
Products then in its possession or control, and submit the same to Xxxxxx
within ten (10) business days of the termination.
(b) Xxxxxx shall then have twenty (20) business days thereafter to
decide whether to purchase any or all inventory with the exception of inventory
necessary to fill existing orders, at the lower of Licensee's cost or fair
market value. If Xxxxxx exercises such right of purchase, Licensee shall
deliver the inventory referred to in Xxxxxx'x notice to Xxxxxx within ten (10)
business days after Xxxxxx'x notice. Xxxxxx shall then pay Licensee (but only
for such delivered inventory as is in marketable condition) within thirty (30)
days after Xxxxxx'x receipt.
(c) If Xxxxxx does not elect to purchase the inventory, for Licensed
Products fully meeting the quality control standards of this Agreement which
were produced prior to termination, Licensee, on an non-exclusive basis, may
dispose of the articles, but only for a period of ninety (90) days after
termination provided all payments with respect to Paragraph 3 hereof.
(d) Except as otherwise specifically provided in this paragraph, all
of the rights of Licensee under this Agreement shall terminate as of the date
of termination, and shall revert immediately to Xxxxxx. All royalties on sales
theretofore made shall become immediately due and payable, and Licensee shall
discontinue forthwith all use of the Licensed Trademarks.
10. This Agreement sets forth the final and complete understanding of the
parties with respect to this subject matter. It is understood and agreed that
there are no other representations with respect to this Agreement, and this
Agreement supersedes all prior discussions, agreements and undertakings
relating to the subject matter hereof. It is further agreed that the rights,
interests, understandings, agreements and obligations of the respective parties
pertaining to the subject matter of this Agreement may not be amended, waived,
modified or supplemented in any respect except by a subsequent written
instrument evidencing the express written consent of each of the parties duly
executed
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by the parties. Any terms inconsistent with or additional to the terms set
forth in this Agreement which may be included with a purchase order,
acknowledgment, invoice, etc., of either party shall not be binding on the
other party hereto.
11. This Agreement shall be interpreted and construed in accordance with
the internal laws of the State of Wisconsin.
12. Notices required or permitted hereunder shall be given by first class
mail, postage prepaid, to the parties at the addresses set forth at the
beginning of the Agreement, with copies to Xxxxxxxx Projects, Inc., 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other addresses as may be specified
by written notice; provided that Licensee must send an additional copy of any
legal notice to Xxxxxx to the attention of Xxxxxx'x "Legal Department" in order
for the notice to be binding on Xxxxxx.
13. Nothing herein contained shall be construed to place the parties in
the relationship of partners, joint venturers or agents, and Licensee shall
have no power to obligate or bind Xxxxxx in any manner whatsoever with respect
to third parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first set forth above.
XXXXXX BREWING COMPANY
By /s/Xxxxxx Xxxxxxx
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TITLE Director Marketing Materials
Corporate Purchasing
XXXXXXXXXXX XXXXX & COMPANY
By /s/ Xxxxx X. Xxxxxxxx
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TITLE President & CEO
Ref. #113089
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Ref. #113089
Schedule A - Licensed Trademarks
Licensed Trademarks means and shall be deemed to mean the XXXXXX GENUINE
DRAFT Beer, XXXXXX Beer, XXXXXX LITE Beer identifications, including their
logos, symbols, trademarks, copyrights, likenesses, depictions, sobriquets and
photographs to the fullest extent that Xxxxxx has, or may hereafter obtain
title or right thereto. Specifically excluded from the Licensed Trademarks
granted hereunder is the RED DOG logo and graphics developed by Plank Road
Brewery.
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Ref. #110389
Schedule B - Licensed Products
Property-identified 100% cotton T-shirts and cotton/poly sweatshirts in adult
sizes M, L, XL, XXL, and boxer shorts.
Licensee agrees to achieve Minimum Net Sales for the Licensed Product(s) herein
during the Term of this Agreement as follows:
$100,00 (US Dollars)
Detailed as follows:
$100,000.00 October 01, 1996 - December 31, 1998
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Ref. #113089
Schedule C - Minimum Guarantee
TOTAL GUARANTEE: Ten Thousand Dollars $10,000.00
The guarantee is due and payable as follows:
Upon Signing $10,000.00 Adv. & Guarantee
